BankerCollege

A key part of commercial real estate (CRE) lending is assessing the bank’s secondary source of repayment for the loan i.e. liquidation of the real estate securing the loan.   The bank obtains an appraisal to independently substantiate the value of the real estate collateral supporting the loan.  As a result of significant losses in the liquidation of real estate collateral in the recessions of 1989-1991 and 2007-2009, the regulators have promulgated very specific regulations and guidance governing a federally insured financial institution’s process for ordering and reviewing appraisals and evaluations.

This real estate webinar will provide an overview of regulatory expectations of the institution’s real estate appraisal process, the process itself and common pitfalls for lenders and credit administration personnel.  The following topics will be addressed:

• Overview of Appraisal Regulations and Guidance
• Uniform Standards for Professional Appraisal Practices (USPAP)
  • Scope of Work
  • Appraisal Content
  • Appraisal Reports

• Regulatory Requirements
  • Appraiser Requirements
  • Appraisal Thresholds
  • Appraisal Content
  • Supervisory Loan to Values
  • Appraisal Exceptions
  • Abundance of Caution
  • High Volatility Commercial Real Estate (HVCRE)
  • Evaluations

• Regulatory Requirements for a Financial Institution Appraisal Program (Policy)
• Ordering and Review of Appraisals and Evaluations
  • Independence
  • Qualifications

• Other Appraisal Issues
  • Residential Tract Development
  • Using an Existing Appraisal to Support a New Transaction
  • Accepting an Appraisal from Another Financial Institution
  • Factors Determining When a New Appraisal is Required